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20 01 MANHATTAN ASSOCIATES ANNUAL REPORT

year in review

Powering Operational Excellence with Extended Supply Chain Execution Solutions

1 Our Mission

2 Financial Highlights

3 Our Value Proposition

4 Letter from the President and CEO

8 Letter from the Chairman of the Board

10 The Board of Directors

11 Executive Officers and Key Members of Management

12 Corporate Overview: The Challenges of Supply Chain Execution

20 Customer Profiles

24 Corporate Information

Securities and Exchange Commission form 10-K

Contents

3 Our Mission

4 Financial Highlights

5 Our Value Proposition

6 Letter from the President and CEO

10 Letter from the Chairman of the Board

12 The Board of Directors

13 Executive Officers and Key Members of Management

14 Corporate Overview: The Challenges of Supply Chain Execution

22 Customer Profiles

26 Corporate Information

Securities and Exchange Commission form 10-K

Contents

Manhattan Associates’ mission is to maximize Operational Excellence for ourcustomers through extended supply chain execution, which is enabled by real-time collaboration, execution and optimization solutions. Extended SupplyChain Execution, or x-SCE, includes warehouse management, optimization andtransportation functionality, and real-time collaboration between customers andsuppliers regarding orders and the movement of goods. Manhattan Associates’x-SCE solutions manage well beyond the four walls of the distribution center andinto the extended supply chain. Our industry-leading x-SCE functionality man-ages from the point of source to point of consumption, from supplier managementto customer management and all internal fulfillment operations in between.

Since our inception in 1990, we have licensed more than 800 customers represent-ing 1,100 facilities worldwide, including some of the world’s leading manufacturers,distributors and retailers.

Our Mission

MANHATTAN AS SOCIATES annual report

To maximize

through...

enabled by real-time...

Operational Excellence

ExtendedSupply ChainExecution

• Collaboration• Execution• Optimization

Manufacturing Shipping Distribution Center Delivery

one.

in thousands

1997 1998 1999 2000 2001Statement of Income Data:

Revenues 6

Income from operations 1, 2, 4, 5, 6

Adjusted net income and pro forma net income 1, 2, 3, 4, 5, 6

Balance Sheet Data:Cash, cash equivalent and short term investmentsWorking capitalTotal assetsTotal shareholders’ equity

$ 155,59733,21822,215

$ 104,189101,224180,703141,187

$ 133,09627,45618,872

$ 67,66770,192

152,375110,001

$ 81,2921,5391,834

$ 39,91546,94880,92358,606

$ 62,06511,2357,908

$ 32,76344,56167,77555,635

$ 32,4578,4115,396

$ 3,1946,268

15,0068,454

Revenues Income from Operations Net Income (pro forma)in millions in millions in millions

97 98 99 00 01 97 98 99 00 01 97 98 99 00 01

$32.5

$62.1

$81.3

$133.1

$155.6 $33.2

$27.5

$8.4

$1.5

$11.2

$22.2

$18.9

$5.4

$1.8

$7.9

(1) In fiscal 1997, these amounts exclude the effect of non-recurring charges to operations of $0.1 million for theamortization of acquisition-related intangibles. Includingthese charges, income from operations in fiscal 1997 was$8.3 million and pro forma net income was $5.3 million.

(2) In fiscal 1998, these amounts exclude the effect of non-recurring charges to operation of $1.6 million in connectionwith the write-off of purchased research and developmentand $0.4 million for the amortization of acquisition-relatedintangibles. Including these charges, income from opera-tions in fiscal 1998 was $9.3 million and pro forma netincome was $6.1 million.

(3) In connection with the conversion from limited liabilitystatus on April 23, 1998, we became subject to federaland state corporate income taxes. Pro forma net incomeis presented as if we had been subject to corporateincome taxes for all periods presented.

(4) In fiscal 1999, these amounts exclude the effect of non-recurring charges to operations of $1.1 million for theamortization of acquisition-related intangibles. Includingthese charges, income from operations in fiscal 1999 was$0.4 million and net income was $1.1 million.

(5) In fiscal 2000, these amounts exclude the effect of non-recurring charges to operations of $3.0 million in connectionwith the write-off of in-process research and developmentand acquisition-related expenses and $1.2 million for theamortization of acquisition-related intangibles. Includingthese charges, income from operations in fiscal 2000 was$23.3 million and net income was $16.3 million.

(6) In fiscal 2001, these amounts exclude the effect of the $4.3million reserve against revenues for a bankrupt customerand $5.2 million for the amortization of acquisition-relatedintangibles. Including these charges, revenues in fiscal2001 were $151.3 million, income from operations was$23.7 million and net income was $16.2 million.

Financial Highlights

two.

YEAR IN REV IEW 2001

The value that our solutions deliver is substantial, tangible and often immediate.Manhattan Associates’ solutions allow users to handle increased transaction vol-umes; scale with their growth — whether due to channel changes or enteringnew geographic markets; meet ever-changing customer demands; and achieve apowerful Return on Investment (ROI) through cost reductions. For example,many of our customers achieve their ROI between six and 12 months after theirsystems go live. Our technology, combined with our vertical industry best prac-tices and domain expertise, enable our customers to optimize their supply chaineffectiveness and efficiencies by:

■ Improving inventory accuracy ■ Increasing inventory turnover and lowering inventory levels■ Improving order throughput ■ Reducing response times ■ Planning optimal outbound shipments to reduce freight costs■ Communicating with trading partners in real time■ Improving communications with other supply chain participants■ Complying with industry shipping standards■ Increasing labor and equipment productivity■ Enabling and facilitating distribution through multiple delivery channels■ Improving customer relationships, thereby increasing orders ■ Providing real-time visibility both within the enterprise and across the

entire supply chain

Our Value Proposition:Delivering Operational Excellence

three.


To Our Shareholders,The tough economic environment of the past 18 months created both chal-lenges and opportunities for Manhattan Associates. I am pleased to report thatthrough the dedication and hard work of the Manhattan Associates team, weachieved impressive increases in revenues and profits and significantly strength-ened our market leadership position and foundation for the future.

This year we embraced the responsibilities that come with being the leader. Wecannot and will not be content with last year’s performance or even this year’sperformance. Instead, we will continue to enhance and expand our world-classcollaboration, execution and optimization solutions. Our singular purpose is tohelp our customers achieve Operational Excellence, which we define as theflawless execution of corporate and financial strategies that exceed customerexpectations, while maximizing shareholder value.

WORKING WITH AND FOR OUR CONSTITUENCIESIn 2001, Manhattan Associates worked to build stronger ties to the three mainconstituencies that we serve. These constituencies are our investors, our customersand our employees. The progress we made with each group is highlighted below.

For shareholders, our priority is to maximize shareholder return over a one- tothree-year horizon, always building for the future and hopefully not sacrificingthe present. Even before 2001 started and well before our competitors, we rec-ognized the economy was slowing, and we proactively positioned ourselves forit. We focused on making the right investments for the right reasons. We askedmore of our people, and we focused on executing, whether it be sales, imple-mentations or development. As a result, we were able to produce excellent resultsin a period where they were the clear exception.

■ Core revenues grew from $107.3 million to $132.9 million, an increase of24%; total revenue increased by 14% to $151.3 million.

■ Adjusted net income increased to $22.2 million compared to adjusted netincome of $18.9 million in 2000, representing an increase of 18%.

■ Cash and short-term investments increased by $36.5 million to $104.2 millionat December 31,2001 from $67.7 million at December 31,2000, a 54% increase.

■ International revenues increased to $26.1 million from $14.9 million, repre-senting a 75% increase. This growth resulted in the Company establishing aCenter of Expertise (COE) in Tokyo and Utrecht, The Netherlands. TheCompany also established a presence in Germany, France and Australia.

Letter from the President and CEO

four.


■ Existing customers continued investing in our solutions, contributing approx-imately 30% of our 2001 license revenues. Despite the slow economy, ourcustomers both broadened the deployment of existing Manhattan Associatessolutions and purchased new products from us.

■ Selected by Forbes Magazine as one of the 200 best small companies in America,with a ranking of No. 23 and the only ranked supply chain management tech-nology provider. Rankings are based on six equally weighted financial metrics.

OUR CONTINUED FOCUS ON CUSTOMERSWe worked hard to understand and meet the needs of our User Community. AtManhattan Associates, the spirit of customer partnerships is evident throughoutour operations. They collaborate with us on new product concepts and devel-opment. They provide valuable input on new supply chain initiatives that impactour solutions and their distribution network. There were many examples ofManhattan Associates’ efforts, some of which are highlighted below, to meet theneeds of our customers.

Introduced SmartInfo™. Manhattan Associates kicked off 2001 by rolling outSmartInfo, a customizable business intelligence tool that provides graphicalrepresentation of historical trends and real-time activity to enable analysis andoptimization of information generated from the user’s extended supply chainexecution solutions suites.

PkMS™ and Logistics PRO™ TMS Integrated. Logistics PRO, ManhattanAssociates’ transportation management system product that was part of the October2000 acquisition of Intrepa, was fully integrated into PkMS. Completed lastsummer, this integration enables our customers to more effectively manage thecosts and processes associated with one of the most complex and costly aspectsof supply chain execution.

Released PkMS Pronto™. PkMS Pronto, an integrated warehouse and trans-portation management system specifically designed for small- to mid-sizewarehouses, was released this past May. PkMS Pronto provides the benefits ofimproved order fulfillment, ease of use and a price point targeted to achieve astrong ROI for less sophisticated facilities.

Released infolink™ 2001R1. This new version of infolink provides real-timeconnectivity and integration to a user’s offshore factories that are either companyowned or contracted. The solution provides the infrastructure needed to col-laborate electronically with supply chain partners by standardizing methods ofinformation exchange, synchronizing business processes and streamlining operations.

five.


six.


Developed a Comprehensive Yard Management Product. In January 2002,we introduced enhanced, comprehensive yard management functionality toaugment PkMS. This enhanced yard management functionality extends beyondthe four walls of the Distribution Center (DC) and provides the user with theability to manage inventory and orders even before the formal receiving processbegins at the dock door.

ISO 9001. Manhattan Associates earned ISO 9001 certification in March 2001.Manhattan Associates is one of the first U.S. software development companiesto achieve ISO 9001 certification under the recently approved version 2000 ofthe standard. Our quality initiatives go beyond ISO and are an ongoing part ofour customer-centric culture.

3PL Business Unit. Last summer, we formed a third-party logistics (3PL) busi-ness unit that focuses on the unique requirements and processes of the 3PLindustry. This new business unit— consisting of dedicated resources from sales,account management, implementation, training and customer support —allowsus to better leverage our industry-leading domain expertise and functionality inthe 3PL marketplace.

International Expansion and Successful Translation of PkMS. In order tomeet the growing needs of customers with international operations, ManhattanAssociates expanded its international reach considerably by establishing itsEuropean headquarters in Utrecht,The Netherlands. We established a presencein France, Germany and Australia. In addition, we entered the Japanese marketby establishing an office in Tokyo early in 2002.

Expanded and Strengthened Our Alliances. Through the ManhattanAssociates Partner Program (MAP2), we continue to formalize and cultivate ouralliances so we can collectively offer our joint customers the best and broadestsupply chain solutions. In 2001, we entered into alliances with such key softwareand material handling providers as Intentia, Manugistics, JDA Software Group,Siemens Dematic, FKI Logistex and Sun Microsystems.

The result of these efforts is that the Manhattan Associates User Communitycontinued to grow in strength and number. During the past year, we also addedmany new customers, including: Ahold; ARAMARK Uniform and CareerApparel; Belkin Components; Bob Evans Farms, Inc.; Deschenes Group; GuitarCenter, Inc.; Harley Davidson; Healthcare Logistics Limited; Hibbett SportingGoods, Inc.; Kmart Corporation; Mary Kay Incorporated; Sara Lee Foods;Wolverine Worldwide, Inc.; and Yazaki North America, Inc.

MANHATTAN ASSOCIATES EMPLOYEES: OUR STRONGEST ASSETManhattan Associates employees’ unparalleled domain expertise, experience andpassion for supply chain excellence are key drivers to our success. Our com-mitment to our employees is to provide an environment where they will bechallenged and have the opportunity for personal growth. We continue to fos-ter the company’s entrepreneurial spirit by creating an environment whereemployees are expected to be immediate contributors. Through our ISOprocesses, up-front training and orientation, strong company culture and closeknit work teams, new employees have the environment to be successful.

Mentoring programs, improved communications, face-to-face career evalua-tions, individual goal setting and in-depth employee training programs work toensure that employees have the opportunity to grow professionally. Each andevery employee is granted options through the company’s Stock Incentive Plan.We are pleased that Manhattan Associates’ voluntary turnover rate was less then6% in 2001, which is well below the industry average. I, along with the man-agement team, ardently believe that a strong, committed employee base leads tobetter customers, better solutions and better alliances.

LOOKING AHEADAs we move through 2002, I remain extremely optimistic about ManhattanAssociates’ prospects for profitable growth. As we enter 2002, we are well posi-tioned as the clear leader in x-SCE, one of the most rapidly growing areas oftechnology. A critical factor to our success is that our solutions provide real valueto our customers. Our technology provides a return on investment (ROI) that istangible and relatively quick. The increasing pace of change in the supply chainforces companies to have their logistics processes as efficient, adaptive and respon-sive as possible, and with systems that are cost effective. No company exceptManhattan Associates is better positioned to excel in such an environment.

I would like to thank Manhattan Associates customers and alliance partners fortheir support in 2001. I would like to send a special thanks to our employeeswho continue to grow and work as a team for the benefit of our customers.Finally, I must thank our shareholders for putting their faith in the leadingprovider of extended supply chain execution solutions.

RICHARD M. HADDRILLPresident and CEO

seven.



eight.

To My Fellow Shareholders,While the past year was difficult for many high-tech companies, ManhattanAssociates forged ahead, posting both revenue and profit gains in 2001. Thesegains were the result of the company strategically expanding key aspects of ourcustomer base, our employee base, our product suites and our international reach.

We believe that international markets will continue to hold tremendous promiseand opportunity in the coming year. As globalization and outsourcing (of bothproduction and logistics) continue, more and more companies, regardless oftheir location, need our solutions to manage their extended supply chains.

I spent a majority of 2001 working with our international teams to expand ourpresence in Continental Europe and spent six months in Europe. Since early in2002, I have been based in Tokyo to lead our start-up efforts in the world’s sec-ond largest economy. In December 2001, Manhattan Associates released a fullyUnicode-enabled version of PkMS to support global customers demandingboth single-byte and multi-byte language sets. We also completed the localiza-tion process for the Japanese-, German-, French- and Spanish-speaking marketsearlier in the year.

We now have 50 international customers and over 100 employees based outsideof North America. I am excited about Manhattan Associates becoming a trulyglobal company.

CORPORATE GOVERNANCE AT MANHATTAN ASSOCIATESGiven the current climate, I believe it is worth noting that ManhattanAssociates’ 800 worldwide employees worked hard in the last year to grow thecompany, but we did so in a manner that was fiscally prudent and responsible.Our balance sheet continues to remain robust with more than $104 million incash. This strength is the result of management’s strong leadership and constantfocus on building a strong, long-term business. We continue to be vigilant aboutthe commitments we make, and we strive to be clear in our communicationswith our employees, customers, alliance partners and investors.

We take our financial reporting very seriously. Manhattan Associates’ auditcommittee, which is a subgroup of the Board of Directors, works to ensure andmonitor the integrity of Manhattan Associates’ financial reporting process.Meeting quarterly with Manhattan Associates’ management and outside audi-tors, this committee consists of three outside, independent directors: TomNoonan, John Hardesty and John Huntz, who serves as the committee’s chair.

Letter from the Chairman

These gentlemen are all seasoned executives who bring a wealth of financial andbusiness expertise to the committee and the board. None of these directors hasformer ties to the company; they are not related to any employees or other direc-tors; they do not work for a firm that is affiliated with Manhattan Associates; andthey do not receive money from Manhattan Associates for non-board services. Iam proud of our tradition of running a responsible business for the long-termbenefit of our customers, our employees and our shareholders.

Succeeding in the economic environment that prevailed through much of lastyear required a great deal of hard work, focus and determination. The result isnot only profitable growth, but also a company that is better prepared to meetthe challenges that lay ahead in 2002 and beyond.

ALAN J. DABBIEREChairman of the Board

nine.


Board of Directors

Alan J. DabbiereChairman of the Board

Richard M. HaddrillPresident and Chief Executive Officer

Deepak RaghavanSenior Vice President,Products and Strategy

Brian J. Cassidy Vice Chairman and Co-Founder,WebForia, Inc.

John R. Hardesty 1, 2

Chairman,Thermo Dynamics, Inc.

John J. Huntz, Jr. 1, 2

Managing Director,Fuqua Ventures, LLC

Thomas E. Noonan 1, 2

President and Chief Executive Officer,Internet Security Systems


ten.

1 Member of Compensation Committee2 Member of Audit Committee

Front Row: John Huntz, Brian Cassidy,Alan Dabbiere and Richard Haddrill.Back Row: Deepak Raghavan, John Hardesty and Tom Noonan.

Executive Officers and Key Members of Management

eleven.


Alan J. DabbiereChairman of the Board

Richard M. HaddrillPresident and Chief Executive Officer

Jeffry W. BaumSenior Vice President,International Operations

Eddie CapelVice President, infolink

Michael CroxtonVice President, Marketing,Alliances and Channel Sales

David K. DabbiereSenior Vice President, Chief Legal Officer and Secretary

Bruce EicherVice President, Customers

Jeffrey MitchellSenior Vice President, North America Sales

Ed QuibellVice President, Business Development

Deepak RaghavanSenior Vice President, Products and Strategy

Ramesh SrinivasanSenior Vice President,Technical

Neil ThallExecutive Vice President

Thomas WilliamsSenior Vice President, Chief Financial Officerand Treasurer

First Row (from left to right): Deepak Raghavan, Richard Haddrill, Neil Thall and Tom Williams.Second Row: Bruce Eicher, David Dabbiere, Ed Quibell, Jeff Mitchell, Ramesh Srinivasan and Jeff Baum.Missing from the photo are Eddie Capel and Mike Croxton.

Regardless of size, geography or industry, companies face huge challenges in

supply chain execution. Trends like globalization; outsourcing; the rise of the

multi-channel environment; increasingly complex customer demands; growing

demands for real-time collaboration; and advanced planning systems’ need for

real-time, granular execution data are all placing tremendous strains on today’s

supply chain infrastructure and systems.

No CEO, COO, CFO or CIO can afford to ignore or deny the impact of these

trends. Companies that fail to respond to them will see their market share eroded

by competitors that are more responsive, yet companies that respond to customers

without the proper cost controls could see their profits suffer. Subsequently, com-

panies face the daunting challenge of re-tooling themselves to best manage these

trends, while also turning in a profitable performance.

This new business model has forced c-level executives to view supply chain exe-

cution in a more strategic light. A company must now develop and maintain a

Retail

Consumer Goods, including Apparel and Footwear

Direct to Consumer

Third Party Logistics

Partnering With Customers in the Following Industries:

Food/Grocery

Healthcare

Industrial/Wholesale

High Tech/Electronics

The Challenges of Supply Chain Execution


twelve.

supply chain that can manage high transaction volumes, respond more quickly,

support more processes, manage more products that have shorter lifecycles and

respond to constantly changing customer requirements.

And the margin for error is getting tighter and tighter. In today’s real-time supply

chain,where safety stocks are radically reduced and the need for accuracy and real-

time responsiveness is essential, even the smallest glitch can have a significant

business impact. When a breakdown does occur, the need to immediately identify

it and take swift corrective action has never been more important.

Helping Our Customers Achieve Operational Excellence

These same supply chain challenges present tremendous opportunities for

Manhattan Associates. To best manage these challenges, our customers need to

achieve Operational Excellence in their supply chain operations. We define

Operational Excellence as the flawless execution of corporate and financial

strategies that exceed customer expectations,while maximizing shareholder value.

It means logistics processes are as efficient, adaptive and responsive as possible.

Manhattan Associates’ sole purpose is to help our customers achieve this state of

Operational Excellence by providing integrated collaboration, execution and opti-

mization software, which we collectively call extended Supply Chain Execution

(x-SCE) solutions. Our x-SCE solutions make extended supply chain execution

— the ability to move product and the associated data flows from the point of

source to the point of consumption efficiently and effectively— a reality.

These solutions transform traditional supply chain execution into a competitive

advantage by broadening the depth and breadth of the traditional Warehouse

Management Systems (WMS) and Transportation Management Systems (TMS)

into a suite of vertically focused solutions that enables Operational Excellence.We

offer functionality that spans from supplier management to customer management

and all internal fulfillment operations in between. Our solutions help companies

thirteen.


create a competitive advantage by building efficiencies and creating profit-gener-

ating opportunities within and beyond the four walls of the enterprise.

Our solutions are best of breed, which gives us a singular focus and purpose:

the extended supply chain, its associated business challenges and the technology

required to meet those challenges head on. Subsequently, no other provider

offers the depth and breadth of functionality required to manage today’s

extended supply chain.

By being best-of-breed and not a broad-based solutions provider, we offer our

customers another benefit: unparalleled domain expertise. We possess an inherent

understanding of the requirements, processes and nuances of our eight industries’

supply chains. By recognizing these differences, we can cost-effectively tailor our

solutions and services to meet the needs of each industry’s supply chain both today

and tomorrow.

Finally, Manhattan Associates solutions provide tight, seamless, real-time inte-

gration across the individual components of x-SCE— collaboration, execution

These Strategies Require Supply Chain Execution Solutions

+ +

➔ ➔ ➔

Corporate Strategy:

Increase sales

through improved

distribution

Corporate Strategy:

Increase order

fill rates through

improved distribution

Corporate Strategy:

Decrease supply

chain costs through

improved distribution

SupplierManagement

CustomerManagement

OutboundTransportation

Outbound /Order

FulfillmentManagement

InventoryManagement

Inbound / Receiving

Management

InboundTransportation

x-SCE ENABLES KEY CORPORATE INITIATIVES


fourteen.

and optimization.This degree of real-time integration is imperative. Without it,

the enterprise cannot enjoy the full benefits of its investment in these solutions.

Incorporating Manhattan Associates’ x-SCE solutions into a corporate strategy

simply makes good business sense. It enables companies to keep customers sat-

isfied, improve trading partner collaboration, enhance productivity and capital-

ize on new revenue opportunities, while reducing costs throughout the supply

chain. All of which positively affects the bottom-line. The ROI these systems

yield cannot be disputed. In this way, our solutions transform the once ignored

realm of warehousing into true extended supply chain execution.

As the global leader in supply chain execution, we have one of the broadest

and deepest product footprints. Our technology includes the following suites

of solutions:

MA FULFILL

MA Fulfill is Manhattan Associates’ solutions suite offering core and advanced

supply chain execution functionality for all types of users — from large, multi-

conglomerate customers to the needs and budgets of small- to medium-size

companies. The suite’s solutions manage all aspects of distribution center (DC)

operations: receiving, returns processing, inventory management and order ful-

fillment, including replenishment, picking, packing and shipping.

Additional components of MA Fulfill:

■ Supports sophisticated value-added programs such as compliant labeling, kit-

ting, assembly, insertion, price ticketing and order personalization

■ Features built-in, industry-specific functionality to satisfy extended supply

chain requirements both today and tomorrow

■ Prioritize and allocate orders based on geography, inventory, availability and

company-specific priorities — by linking directly with either an ERP or a Web

site — across an entire business

■ Track and bill for all activities in the distribution center

The suite features built-in, industry-specific functionality to satisfy extended

supply chain requirements and help users reach operational excellence by opti-

fifteen.


mizing distribution performance and eliminating costs associated with the inef-

ficient movement of goods, redundant processes and excess inventory.

MA DELIVER

MA Deliver is Manhattan Associates’ suite of solutions offering advanced trans-

portation management functionality. MA Deliver manages one of the largest

controllable costs in the extended supply chain: transportation. By eliminating

manual processes; enabling rate shopping, pooling and zone skipping; and

automating communication with carriers via load tendering, appointment

scheduling and EDI, MA Deliver’s solutions help users significantly improve

their decision making and execution. The suite’s broad, deep functionality in

transportation execution and short-horizon planning, coupled with its tight

integration with warehouse management systems, provides users with benefits

such as reduced freight charges, elimination of back-end processes, reduced

labor costs and additional overhead reduction.

MA OPTIMIZE

MA Optimize is Manhattan Associates’ solutions suite comprised of business intel-

ligence, labor optimization and facility optimization tools.The business intelligence

MANHATTAN ASSOCIATES COMPETITIVE ADVANTAGE

■ Singular Focus on Extended Supply Chain Execution ■ 11-Year History in Supply Chain, Distribution and Logistics■ Broadest and Deepest Product Footprint in the Industry ■ Leading Edge, but Proven Technologies■ Product Modularity, Scalability and Upgradability■ ISO Compliant Processes and Upgradability■ Growing International Presence■ Strong, Industry-Based and Focused Customer Relationships■ Key Partnerships ■ Financial Strength

sixteen.


tool enables analysis and optimization of historical trends, real-time activity and

other information generated from the supply chain execution system. The labor

optimization tool provides distribution center managers with the ability to track

employees’ performance against DC activities and assess the efficiency of current

operations to better plan for upcoming labor requirements. The facility optimiza-

tion tool uses genetic algorithms to determine the most beneficial and ergonomic

placement of items on the pick line, resulting in reduced labor costs, fewer work-

ers’ compensation claims and greater throughput. It also has the ability to perform

daily maintenance on a company’s pick line, which ensures constant productivity.

MA COLLABORATE

MA Collaborate is Manhattan Associates’ suite of solutions providing real-time

visibility and connectivity into today’s extended supply chain. The suite’s func-

tionality enables a company to achieve process and information synchronization

with both their suppliers and their customers, which results in reduced labor

and facility costs and improved customer service. MA Collaborate also provides

Global Inventory Visibility (GIV) for peak responsiveness to exception conditions

and supply chain event management for visibility to granular events within the

extended supply chain.

MA CONNECT

The solutions available in MA Connect fully integrate our software with virtually

all business applications and material handling systems and equipment. Designed in

partnership with leading enterprise software and material handling providers, our

proven integration solutions help share real-time data with virtually every system

in the supply chain, regardless of protocol. The result is faster implementation

times, increased performance, lower cost of ownership and reduced risk.

MA MAXIMIZE

MA Maximize, Manhattan Associates’ suite of services, provides a wide range of

services to maximize the impact, power and improved productivity of our x-SCE

solutions. Using a proven approach to project management, we can accurately

and successfully plan and execute projects, regardless of size or scope.

seventeen.


To ensure a total solution, we work closely with our customers and implemen-

tation partners to identify high-level requirements based on the customer’s cor-

porate goals and operational needs. The specifications and operational require-

ments are expanded to define a working functional document. Combining this

functional document with a detailed design, Manhattan Associates implements

real-time collaboration, execution and optimization solutions that help cus-

tomers reach Operational Excellence, which is defined as the flawless execution

on corporate and financial strategies to maximize shareholder value.

Since 1991, we have consistently delivered these systems on time and on budget

by institutionalizing a standard implementation methodology that capitalizes on

the company’s collective experience, which includes installing supply chain exe-

cution solutions at over 1,100 facilities worldwide. This defined methodology’s

fundamentals include teamwork, structured client involvement and the use of

discrete, linear stages, each with concrete deliverables. Manhattan Associates’

proven project implementation methodology has been developed, refined and

enhanced with each completed installation.This methodology takes into account

the proper staffing to meet the client’s deadlines and the proper procedures and

documentation resulting in a successful implementation.

Knowledge Transfer Group. Manhattan Associates’ Knowledge Transfer Group

(KTG) is dedicated to providing multi-faceted training that helps users get the

most out of their investment in the company’s suites of extended supply chain

execution solutions, including MA Fulfill, MA Deliver, MA Optimize, MA

Collaborate and MA Connect.

KTG employs a practical, real-world approach to training, offering a variety of

platform-, industry- and operation-specific training classes for different types of

users. From case study demonstrations to hands-on labs, our energetic and com-

prehensive learning environment provides the necessary skills and information

to help ensure success. KTG also offers Computer Based Training (CBT) that

can be customizable for all types of employees, skill levels and corporate systems.

In addition, KTG offers Quick Reference Guides that provide troubleshooting

advice and direction, which are written to a company’s specific needs.

eighteen.


Client Support Services. Through our comprehensive Customer Support pro-

grams, we extend our relationships with customers far beyond the initial system

implementation. Committed to a long-term, mutually beneficial relationship as

well as to our customers’ continuing success, we have a wealth of dedicated

resources that help customers achieve Operational Excellence.

■ Global Support Center. Based at corporate headquarters in Atlanta,

Manhattan Associates’Global Support Center is available 24/7 via phone,Web

site, e-mail or fax.This team is dedicated to supporting our growing customer

base and consists of experienced eServer iSeries (AS/400), UNIX and n-tier

consultants for system-specific help.

■ Worldwide Customer Support and Software Enhancements Policy. Over 90%

of our client base takes advantage of this policy, which provides efficient and

effective service to clients, while helping them master the many opportuni-

ties presented by the company’s solutions.

Benefits of Manhattan Associates’Worldwide Customer Support and Software

Enhancements policy include:

■ 24/7 Call Center support with free service for all warranty issues;

■ Access to all software version updates and enhancements;

■ Retail compliance guarantee;

■ Training class discount of 10%;

■ Free annual one day on-site visit by experienced Manhattan Associates con-

sultants; and

■ Free access to MA Gatew@y, Manhattan Associates’ customer extranet.

Account Management Program. Manhattan Associates has an Account

Management program,which exists to serve as an executive level contact for our

clients. Every Manhattan Associates customer is assigned an account manager

even before the installation begins.This team strives to build and maintain inti-

macy with the customers by being knowledgeable, proactive points of contact.

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Leading European Grocery Distributor Consolidates, Automates

Geest plc, Europe’s leading supplier of fresh prepared food and produce, distributesits salads, soups, sauces, dips, dressings and ready meals to all major retailers through-out the UK and Northern Europe. Several years ago, the company began a com-prehensive reengineering of their distribution operations, including the consolida-tion of eight existing warehouses into one, centralized, state-of-the-art, chilled DCthat is located in Spalding, Lincolnshire. From this project, the company wanted toimprove their supply chain efficiencies and customer service.They also needed thisnew facility to manage the significant growth they were experiencing in both thevolume and variety of goods processed.

To best manage this new DCand its substantial growth rate, Geestpartnered with Manhattan Associates inJanuary 2001. Within eight months,Geest’s new DC was designed and builtand Manhattan Associates solutionswere installed to manage all aspects ofthe DC’s operations. For Geest,Manhattan Associates solutions providetightly controlled management andoversight of the distributor’s inventory, which is perishable and has a short shelf life.Additionally, the systems track critical lot and date information as the inventorymoves through the DC and on to the customer. Manhattan Associates’ robust,industry-specific order fulfillment functionality enables Geest to process orders withperishable items quickly and efficiently.

In this new facility, manual, paper-based processes have now been replacedwith a new, totally paperless RF environment, which has allowed Geest to substan-tially reduce errors and improve order throughput. Additionally, Geest uses PkMS’stask management technology to automate decision making of warehouse personneland enable the most productive use of personnel and equipment resources. Sinceimplementing the system, Geest has achieved service levels of 99.81 with all theirmajor retail customers.

Terry Moore, general manager of logistics for Geest, says,“It has been a toughnut installing a new WMS in a brand new DC inside six weeks, but together we havecracked it, and our success puts Geest at the forefront of the supply chain for yearsto come. Our operation runs around the clock, and we rely heavily on Manhattan’simmediate response and strong support team.”

Customer Profiles

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Sainsbury’s Teams with Manhattan Associates to Reengineer their Supply Chain

“Our decision to select Manhattan Associates was influenced by their depth offunctionality, giving us the opportunity to make a stepped change in our workingprocesses within the physical operation. In addition, the performance capabilitiesof their systems, as well as the quality of their team increased our overall confi-dence in Manhattan Associates,” said Andy Banks, supply chain developmentdirector for Sainsbury’s.

The project called for Manhattan Associates x-SCE solutionsto be installed at over 30 of their primary consolidation centers,multi-temperature regional distribution centers and next genera-tion fulfillment centers. The first phase of the project focuses oninstalling PkMS. Currently, two facilities slated for implementa-tion are now live with this system, with implementations at theremaining facilities scheduled over this year through to 2005.

As a result of their supply chain reengineering efforts,Sainsbury’s is already experiencing significant improvements at

each DC and across their supply chain network. The company’s new streamlinedoperations have since revealed the urgent need for real-time collaboration betweenthe retailer and their suppliers and consolidation partners. Without this collabora-tion, Sainsbury’s would not gain the maximum benefits and their ROI would suffer.

In December 2001, Sainsbury’s announced that it would implement—acrossits entire supply chain —infolink, Manhattan Associates’ B2B collaboration solu-tion. Once the implementation of infolink is completed in September 2002,Sainsbury’s will have the ability to collaborate—via the Web-with their extensivemix of suppliers and consolidators. Infolink will enable these suppliers and consol-idators to receive and manage purchase orders electronically; create and transmitASNs; and print compliant inbound pallet labels— all in real time, regardless of timeor location. The initial phase of the project is already underway, with key suppliersand “hub operators” being briefed on Sainsbury’s overall supply chain initiative andhow this initiative improves retail/supplier interaction.

Banks concluded by saying, “infolink will provide us with end-to-end visi-bility throughout our supply chain and enables us to develop strong collaborativecommunities with our suppliers. Not only is data exchanged in real time, but nowour trading partners can react to the data to ensure product continues to movethrough the supply chain as quickly and efficiently as possible.

Supply Chain Event Management

Inventory Visibility

Customer Process Supplier ProcessIntegration Integration

Suppliers Your Operation Customers

COLLABORATIVE LOGISTICS = VALUE

Global 3PL Provider Supports JIT Environment

APL Logistics emerged almost three decades ago from the leading innovator inglobal shipping, APL Ltd. Since its founding, APL Logistics has steadily developedservices for every step in the global supply chain, with enabling technologies tomeasure, manage, and improve its performance. With nearly 300 locations spanning56 countries,APL Logistics service offerings include overseas vendor management,freight consolidation, multi-modal transportation management and value-addedwarehousing and distribution services. Information and information services are acritical element of consistently excellent execution and supply chain event manage-ment from factory floor to customer door. Four of those facilities in the U.S. servicea global manufacturer and distributor of technology products.

APL Logistics partnered with Manhattan Associates to put together a world-class logistics solution to service this manufacturer’s final assembly facilities.At thesefour DCs, the suppliers to the manufacturer are responsible for maintaining theappropriate level of inventory to support the manufacturer’s final assembly operations.In essence, through implementing this Vendor Managed Inventory (VMI) concept,APL Logistics has implemented more than 34 separate instances of the warehousemanagement systems solution.

Manhattan Associates solutions are installed at these DCs to manage thereceiving, inventory management, picking, packing and shipping of orders.Manhattan Associates technology is also at work to provide the manufacturer and itssuppliers with real-time visibility into the VMI DCs, including the status of ordersand the inventory of every item in the distribution centers so that the inventory istruly managed by each individual supplier.

The process works as follows: the manufacturer places an order — via theWeb—with APL Logistics for needed inventory. These orders are then downloadedinto PkMS, which immediately organizes the orders into waves. The start of thewave process also initiates infolink to send the manufacturer a message with the real-time status of the inventory requested so that production and assembly processes canbe scheduled.

After the wave process is complete, infolink sends another alert to the man-ufacturer that contains the inventory allocated for that order and what, if any, inven-tory is not available. Within very short and time definite intervals, APL Logistics,aided by Manhattan Associates technology, must wave the orders, pick, pack and shipthe orders— these orders must arrive on the manufacturer’s assembly staging areas.

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■ Increases sales with betterin-stock position

■ Improves customer service

■ Improves inbound productivity

■ Improves buyer’s access to relevant information

■ Increases real-time visibility toinventory, orders and shipments

MA COLLABORATE

Customer Profiles

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While the product is being readied for shipment, infolink sends another alert to themanufacturer notifying them that the shipment is on its way. This notification, alongwith the fact that all outgoing cartons and pallets are bar coded, smoothes thereceiving process at the final assembly facilities.

Besides a substantially reduced order processing time, APL Logistics providesthis manufacturer and its suppliers with the systems and processes needed to achievereal-time global inventory visibility, which allows true collaborative commerce tooccur on a daily basis. This visibility ensures the manufacturer always has the rightproducts in the right quantities arriving at the right time, which is critical to sustaintheir world-famous JIT environment.

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Corporate Information

REGISTRAR AND TRANSFER AGENT

SunTrust Bank,Atlanta58 Edgewood AvenueSuite 225 AnnexAtlanta, Georgia 30303

Inquiries regarding stock transfers, lost certificates, or address changes should bedirected to the above address.

FORM 10-K

A copy of the 2001 Form 10-K, filed with the Securities and ExchangeCommission, may be obtained by shareholders without charge by writing to theManhattan Associates Investor Relations department.

NASDAQ SYMBOL

The Company’s common stock is traded in the Nasdaq National Market underthe symbol MANH.

GLOBALHEADQUARTERS2300 Windy Ridge Pkwy7th FloorAtlanta, GA 30339Tel: 770.955.7070Fax: 770.955.0302

MANHATTAN ASSOCIATES CUSTOMERS

CONSUMER GOODS(includes Apparel/Footwear)

ARAMARK Uniform and Career Apparel, Inc.

Calvin KleinElizabeth ArdenNewell RubbermaidSEIKO Corp. of AmericaThe Diamond Trading CompanyThe Stride Rite CorporationWaterford Wedgewood USA, Inc.

DIRECT-TO-CONSUMER

Cabela’sColdwater Creek Columbia SportswearCornerstone Brands, Inc.J. Jill GroupKBKids.comNordstrom.comPatagonia

FOOD AND GROCERY

Alliant Atlantic FoodserviceAmerican Italian Pasta CompanyBen E. Keith CompanyBurns Philip Food/Tone BrothersHiram Walker & SonsOrefield Cold StorageSainsbury’s Supermarkets Ltd.Sara Lee Foods, Inc.

THIRD PARTY LOGISTICS

APLClientLogic CorporationCorporate ExpressExel Logistics Langham LogisticsSalesLinkTibbett and Britten Ltd.

HEALTHCARE

Abbott Laboratories, Inc. Amerisource Health CorporationBanta HealthcareF. Dohmen CompanyOcular Sciences, Ltd.Pfizer Canada, Inc.Steifel Laboratories, Inc.Stryker Endoscopy

RETAIL

American Eagle OutfittersDebenhams Retail PlcMary KayNordstromThe Children’s PlaceThe LimitedThe Sports AuthorityToo, Inc.

INDUSTRIAL AND WHOLESALE

AGFA/BayerLiberty HardwareLoctite CorporationMotors & Armatures, Inc.O’Reilly AutomotivePPG Architectural FinishesRain Bird SalesStrauss Discount Tire

HIGH TECH AND ELECTRONICS

Belkin ComponentsCanon (UK) LimitedEGS Electrical GroupFesto CorporationMetatec CorporationMicrowarehouse, Inc.Olympus AmericaSiemens Energy & Automation

MISHAWAKA4215 Edison Lakes PkwySuite 100Mishawaka, IN 46545Tel: 219.247.1570

MAINLAND EUROPEMeentsestraat 816987 CL GiesbeekThe NetherlandsTel:+31 (0)313 630317

UNITED KINGDOM2 The ArenaDownshire WayBracknell, Berkshire RG12 1PUTel:+44 (0)1344 318000

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